Henry Fayol’s Fourteen Principles of Management

The fourteen principles of Henry Fayol were first published in 1914 and almost 100 year on they are still relevant. Henry Fayol published his 14 principles in his book “Administration Industrielle et Generale”. Fayol also created six primary functions which go hand in hand with the principles.

1. Division of work

The object of division of work is to derive the benefits from the principle of specialization which can be applied not only in technical work, put in all other work as well. Work should be divided among individuals and groups to ensure that effort and attention are focused on special portions of the task. Fayol presented work specialization as the best way to use the human resources of the organization. When employees are specialized, output can increase because they become increasingly skilled and efficient.

2. Authority and responsibility

Henry Fayol finds Authority and responsibility to be related with the latter arising from the former. An ideal manger is expected to have official authority arising from official positions as well as his inherent personal authority. Authority was defined by Fayol as the right to give orders and the power to exact obedience. Responsibility involves being accountable, and is therefore naturally associated with authority. Managers must have the authority to give orders, but they must also keep in mind that with authority comes responsibility

3. Discipline

A successful organization requires the common effort of workers. Penalties should be applied judiciously to encourage this common effort. “Discipline is what the leaders make it” through the observance of agreements, because agreements spell out to formalities of discipline. Three requisites of discipline are

(a) Good supervisors at all levels,

(b) Clear and fair agreements, and

(c) Judicious application of penalties of sanctions.

4. Unity of Command

This principle requires than employee should receive orders form one superior only. Dual command wreaks havoc in all concerns, “since authority is undermined, discipline in jeopardy, order disturbed and stability threatened.”

5. Unity of direction

Fayol discussed this principle of unity of direction in a different way from that of unity of command. While unity of direction is concerned with the functioning of the body corporate, unity of command is only concerned with the functioning of personnel at all levels. For the accomplishment of a group of activities having the same objective, there should be one head and one plan. “A body with two heads is in the social as in the animal sphere a monster, and has difficulty in surviving. The entire organization should be moving towards a common objective in a common direction.

6. Subordination of individual interest to general interest

The interests of one person should not take priority over the interests of the organization as a whole. Common interest must prevail over individual interest, but some factors like ambition, laziness, weakness and others tend to reduce the importance of general interest.

7. Remuneration of personnel

As the prices of services rendered remunerations should be fair and satisfactory to both the parties. Many variables, such as cost of living, supply of qualified personnel, general business conditions, and success of the business, should be considered in determining a worker’s rate of pay. Employee satisfaction depends on fair remuneration for everyone. This includes financial and non-financial compensation.

8. Centralization

Fayol defined centralization as lowering the importance of the subordinate role. Everything which goes to increase the importance of the subordinate’s role is decentralization, everything which goes to reduce it is centralization. The question of centralization or decentralization holds the key to the utilization of all faculties of the personnel. The degree to which centralization or decentralization should be adopted depends on the specific organization in which the manager is working.

9. Scalar chain

It is the chain of superiors or the line of authority form the highest executive to the lowest one for the purpose of communication. The need for swift action should be reconciled with due regard to the line of authority by using “gang plank” or direct contact. The existence of a scalar chain and adherence to it are necessary if the organization is to be successful. Employees should be aware of where they stand in the organization’s hierarchy, or chain of command.

10. Order

This is a principle of organization relating to things and persons material order requires “a place for everything and everything in its place” and social demands the engagement of “the right man in the right place.”

11. Equity

Equity is greater than justice since it results from the combination of kindliness and justice. The application of equity requires much good sense, experience and good nature with a view to securing devotion and loyalty form employees. All employees should be treated as equally as possible.

12. Stability of tenure of personnel

Stability of tenure is essential to get an employee accustomed to doing a new work and to enable him in performing it well. Instability of tenure is an evidence of bad running of affairs.

13. Initiative

The freedom to purpose a plan and to execute it is what is known as initiative that increases zeal and energy on the part of human beings. Since initiative is one of “the keenest satisfactions for an intelligent man to experience.” Fayol advised managers to secure as much initiative from employees as possible.

14. Esprit de corps

This is an extension of the principle of unity of command whereby team work is ensured. To maintain proper esprit de corps in the organization, personality politics and abuse of written and communications are to be guarded against.

Fayol’s six primary functions of management, which go hand in hand with the Principles, are as follows: